Should at&t sell DIRECT?

[slice1900]

I doubt that they would start using the 119 Sat for any more than tHey already do ...
If they were to do that, they would have to go out to each sub that will potentially get anything off the 119 and put up a different LNB again.
They are trying to reduce the truck rolls ...

The way I think it is going to work is this:

1) mirror 95/119 onto reverse band (they are in the process of this now, channels are in "TEST")
2) all new residential installs get SL3RB (already the case, except for few limited cases where people get SL5RB)
3) one of two things happens, not certain which happens first but either:
3a) T16 launches and goes live, enabling 8 new transponders at 103ca, OR
3b) Directv shuts down MPEG2 SD on 101, allowing some HD channels to move there, thus freeing up Ka on 99/103
4) the 95/119 "mirror" moves to Ka
5) 95 & 119 are shut down

The reason why I think 95/119 content won't remain on reverse band in the long term is because of MDUs. In order to have the channels on 95/119 on reverse band, the MDUs not only need to swap in a legacy reverse band LNB they also need to replace the SWM8/SWM16/SWM32 switches with DSWM30s - at least for any tenant who needs to access channels on reverse band.

Now maybe there's a big effort underway where Directv is telling MDUs "you need to have this done by <some date later this year>" but that sounds like a pretty big project so it just seems easier to put those channels on Ka so the MDUs can take their time and won't need to be fully "reverse band ready" until 4K channels start using reverse band. No idea when that will happen, but since there's still no sign of real 4K channels on the horizon and a lot of Ka bandwidth will be freed up by the end of this year, they can probably put it off for a few more years at least if they choose to.

 

[nelson61]

A nice summary illustrating how Directv is dragging AT&T's performance down and why they might dump Directv to stop the hemorrhaging.

The WP has a paywall but infrequent viewers have a few "free" articles (original source is attributed to Bloomberg).

https://www.washingtonpost.com/busi...67190c2fd08_story.html?utm_term=.3debd384300f

 

[slice1900]

That ignores the main reason they bought Directv, which was to get scale so they could cut better deals with networks. AT&T's CEO said at the time that they were paying $14 per month per subscriber more for equivalent content than Directv was. If you want to compete in streaming a cost base $14/month higher will kill you.

 

[nelson61]

That ignores the main reason they bought Directv, which was to get scale so they could cut better deals with networks. AT&T's CEO said at the time that they were paying $14 per month per subscriber more for equivalent content than Directv was. If you want to compete in streaming a cost base $14/month higher will kill you.

Scale means nothing if your EBITA goes to hell.

The graph projects the entertainment group -Directv segment- EBITA (earnings before interest, taxes, amortization) to decrease from 12 billion a year in 2016 when they did the deal to less than 8 billion in 2022.
This is the measurement that sets the groups value.

 

[ScottChez]

I really think all the numbers will change once all the ATT owned properties start doing full time 4K and or HDR channels and one of the few system with capacity to carry them all just happens to be Directv SAT and with all the free capacity with the new reverse band and SD channel clean up.
We are all forgetting the media content ownership factor

- Dish seems to be low on free space.
- Cable is using all their space on faster internet so they wont have it either
- FIOS can compete but they have a limited coverage area.
- Stream can also but I have tried the Big 3 with super high speed and It is cuts out a lot even on HD, its not ready yet, its hard to do real time. On Demand like with Netflix is easy as you can compress days before its needed.

 

[Juan]

I really think all the numbers will change once all the ATT owned properties start doing full time 4K and or HDR channels and one of the few system with capacity to carry them all just happens to be Directv SAT and with all the free capacity with the new reverse band and SD channel clean up.
We are all forgetting the media content ownership factor

- Dish seems to be low on free space.
- Cable is using all their space on faster internet so they wont have it either
- FIOS can compete but they have a limited coverage area.
- Stream can also but I have tried the Big 3 with super high speed and It is cuts out a lot even on HD, its not ready yet, its hard to do real time. On Demand like with Netflix is easy as you can compress days before its needed.

You need 4k channels to exist before you can add them

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[nelson61]

You need 4k channels to exist before you can add them

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And it will be many years if ever before there is much 4k production. Carriers are trying to drive down costs, not increase them so as to not lose customers.

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[Juan]

And it will be many years if ever before there is much 4k production. Carriers are trying to drive down costs, not increase them so as to not lose customers.

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the big mystery is that the NFL has used 4k cameras for years but yet no 4k Superbowl or playoffs

 

[ScottChez]

I remember when many used to say for HD we would never get more than a few channels as ot cost to much to do the bandwidth. Now look at it. Everything is HD
Give it a few years and we will have dozens in 4k. We just dont know when as for each contrnt. that is a company seceret

 

[dishcomm]

A merger wouldn’t be that bad if it was Directv taking over Dish and getting rid of Charlie and all the upper management in Denver.

That would be one hell of a dish

99/101/103/110/119/129 plus all the reverse band stuff.

Better get some 4K channels and all the local sub channels

My guess is if such a thing were to slide by the FCC, which based on track record, it wouldn't, the new company would sell off transponders or even birds.
Plus, with the debt load, frequency spectrum acquired in the auctions would have to be sold in order to improve cash position.
I think this is all moot. There isn't any logical reason to take on so much debt.

 

[Claude Greiner]

Dish probably has a few million newer canceled customer boxes laying in their warehouse so they definitely would not have a prohibitively expensive box replacement cost if the got rid of sd

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I’m sure of that.

I think it’s at the tipping point right now where they just need to swap out the older subs who will be with them till they Day they go out of business.

The only issue with these upgrades is that there is a small percentage of customers they will actually loose over a free upgrade.

The tech will not show, customer will not like the feel of the new equipment etc.

 

[Soccernut]

the big mystery is that the NFL has used 4k cameras for years but yet no 4k Superbowl or playoffs

When this new technology hits sometime in 2020 you will see NFL games in 4k

What is Next Gen TV and when will it launch?

 

[slice1900]

Scale means nothing if your EBITA goes to hell.

The graph projects the entertainment group -Directv segment- EBITA (earnings before interest, taxes, amortization) to decrease from 12 billion a year in 2016 when they did the deal to less than 8 billion in 2022.
This is the measurement that sets the groups value.

The Directv group today isn't just satellite it is satellite and Directv Now. The Directv Group in 2022 will also include the IP version of Directv they are launching later this year. Part of that earnings decline could be due to assumptions of having to offer lower prices on the IP version to compete with other streaming MVPDs. They won't have to lower prices on satellite - people who want a better deal will choose the IP version, people who don't have good enough internet to stream almost by definition can't get cable so Directv's only competition for those customers will be Dish satellite.

 

[nelson61]

The Directv group today isn't just satellite it is satellite and Directv Now. The Directv Group in 2022 will also include the IP version of Directv they are launching later this year. Part of that earnings decline could be due to assumptions of having to offer lower prices on the IP version to compete with other streaming MVPDs. They won't have to lower prices on satellite - people who want a better deal will choose the IP version, people who don't have good enough internet to stream almost by definition can't get cable so Directv's only competition for those customers will be Dish satellite.

So their 6 year objective is to decrease ebita ??

I think not.

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[Juan]

When this new technology hits sometime in 2020 you will see NFL games in 4k

What is Next Gen TV and when will it launch?

Dont need that new technology

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[nelson61]

Last year at&t told the judge, satellite customers would see decreased prices if the Warner deal was approved.

"Divestitures here would destroy the very consumer value this merger is designed to unlock. Divesting DirecTV would eliminate the price decrease for millions of DirecTV consumers predicted by the government itself, and divesting Turner would eliminate the content innovations and the advertising benefits that put downward pressure on Turner prices," the company said in a court filing"

Quite the opposite seems to be happening.

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[Soccernut]

Dont need that new technology

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I was under the impression that local networks CBS, NBC,FOX, that hold the main rights to NFL would need to be capable of transmitting 4K signals on the local channels, I believe right now there is no way to do better than HD.

 

[slice1900]

So their 6 year objective is to decrease ebita ??

I think not.

If they believe the market is changing to where there will be more competition for traditional cable/satellite providers due to streaming MVPDs like Sling, Vue etc. as well as pure streaming options like Netflix and Hulu, they know they won't be able to make as much money per customer as they used to. It is like if you owned the only gas station in town and heard about plans for someone to build another one. You'd realize you aren't going to make as much money as you did before, so you would make plans with the goal of minimizing your loss of profit.

 

[ScottChez]

Flash back day . . .
With Competition it sure would be nice if Directv and Dish would go back to the old models from 2004 and try to be the Dirt Cheap provider.
So cheap that everyone wanted it as Cable was double in price and they had the better quality picture.
Lately is seems cable is just a few dollars more that Directv or Dish once you factor in the internet and the picture is about the same.

Getting Directv or Dish is not that exciting like in the year 2004

 

[nelson61]

If they believe the market is changing to where there will be more competition for traditional cable/satellite providers due to streaming MVPDs like Sling, Vue etc. as well as pure streaming options like Netflix and Hulu, they know they won't be able to make as much money per customer as they used to. It is like if you owned the only gas station in town and heard about plans for someone to build another one. You'd realize you aren't going to make as much money as you did before, so you would make plans with the goal of minimizing your loss of profit.

I think there is a much simpler explanation.
AT&T guessed wrong when they bought Directv. They used up their credit line buying a dying business
Then a couple years later, their studies indicated content and streaming would be king so they went after Time Warner and now are leveraged to the gills.
And now Directv is like an appendix. It might be useful but no one can figure out its value so the Directv girl/guy sits at the far end of the table when AT&T business is being discussed.

Dish had made a similar decision a few years back when they bought a bunch of reverse band licences, planning to go after more customers by significantly pumping up their satellite bandwidth.
They said satellite growth would be something like 1 percent per year.

Then they saw what was really happening and paid the penalties and walked away from those licences and capital expenses.

Today, we see that satellite not only is not growing, it is decreasing at a multiple percentage rate each year.

Businesses make mistakes and this was a big one for AT&T. The only reason they have not dumped it to reduce debt is they don't want to take the financial hit of writing down the Directv value.